New Measures for lmplementing Flexible Retirement Mechanism

On January 1, 2025, the Ministry of Human Resources and Social Security and two other departments of China jointly issued Interim Measures for the Implementation of a Flexible Retirement Mechanism (“Measures”) to enforce the previously adopted policy in connection with gradually raising the statutory retirement age.

I. New Retirement Policy

In September 2024, China adopted a new retirement policy aimed at advancing reforms to gradually raise the retirement age in a prudent and orderly manner. Specifically, starting from January 1, 2025, the new statutory retirement age of men and civil servant women (whose current retirement age is 55) will be extended by one month for every four months to 60 and 58, respectively, and the new statutory retirement age of blue-collar women whose current retirement age is 50 will be extended by one month for every two months to 55. The new policy also introduces a flexible retirement mechanism, allowing employees to voluntarily choose to retire earlier or extend their retirement for a certain period. You may refer to our previous newsletter “China Plans to Raise Retirement Age Starting from January 2025” for details.

This Measures further stipulate the procedures for applying for flexible retirement and the requirements for receiving pensions, among other details. Notably, the Measures only apply to the individuals who reach statutory retirement age on or after January 1, 2025.

II. Conditions and Procedures of Early Retirement

Employees may voluntarily retire up to 3 years earlier than the new statutory retirement age provided that (i) their pension contributions have reached minimum period; and (ii) their age has reached previous statutory retirement age (i.e. 50 for blue-collar women, 55 for civil servant women and 60 for men).

Such employees shall notify their employers in writing at least 3 months prior to their scheduled retirement.

III.Conditions and Procedures of Postpone Retirement

Employees may postpone retirement by up to 3 years beyond the new statutory retirement age, subject to mutual agreement with their employers.

Such employees shall agree with their employers in writing at least 1 month in advance (clarifying the postponed retirement period and other employment arrangements) once the employees reach the statutory retirement age. It is worth noting that the postponed retirement period is limited to 3 years and shall not be further extended once determined. During the postponed retirement period, the employment relationship between employees and their employer continues. Moreover, employers shall fulfill the statutory obligations (such as the social security contribution and housing funds contribution) and safeguard the rights and interests of employees pursuant to the Chinese labor laws. 

The postponed retirement mechanism does not apply to the following two types of individuals:

(i) civil servants, leaders and other managerial personnel of state-owned enterprises (SOE) and institutions;

(ii) individuals who have already received pensions.

IV.Minimum Pension Contribution

Currently, the minimum years of pension contributions are 15 years. Starting from 2030, the minimum years will be gradually increased from 15 to 20 years, with an annual increment of six months. 

Subject to the above minimum years of pension contribution, employers are obliged to submit pension applications to social insurance agencies no later than the month in which employees determine to retire. Employees may receive their pension from the month following the approved retirement date.